The Challenges Facing Unions In Australia

The Challenges Facing Unions In Australia

ACTU Assistant Secretary, Bill Mansfield speaks on the future of trade unionism in Australia.

1. Introduction

1.1 Thank you for the opportunity to address an issue of considerable significance to the future well being of working people in Australia.

 

1.2 1996 is a critical point in determining the future of trade unionism in Australia.

 

1.3 For much of this century unions had the luxury of not having to critically re-assess either their strategies or their performance in servicing the needs of their members. The characteristics of Australian employer/employee relations for decades have been an adversarial industrial relations culture, management attitudes which regarded labour relations as either of marginal importance or as an issue to be left to the IR specialists, an industry based Award system which could be somewhat inflexible in catering for the needs of individual enterprises and wage bargaining which was largely undertaken in industry level negotiations or through the Industrial Relations Commission arbitration process for national wage and industry level adjustments.

 

1.4 As an overlay to the industrial relations system Australia's economic environment was regulated by high levels of protective tariffs, fixed exchange rates, controls on currency movements and a regulated financial system. Additionally, in the three decades following the Second World War as the European and Asian economies were building-up there was little external pressure to change the traditional way of doing things.

 

1.5 In acknowledging the way in which the Australian economy operated in the forty years after 1945 it is worth stating that there were outcomes to admire. In general we saw a gradual rise in living standards during the whole of the period. Unemployment was very low by comparison to today's levels. The benefits of the economic growth were shared fairly equitably. There was less evidence of fabulous wealth being accumulated by some people from speculation and paper shuffling. We accepted millions of migrants and gave them a fresh opportunity without serious social dislocation. They were the days which led Australia to be dubbed The Lucky Country.

 

1.6 The fifties and sixties also marked the high point in union membership. In 1960 union membership represented around 52% of the workforce. In my own case, along with around 500 other "young men of British nationality" I joined the telecommunications provider, the Post Master General's Department, on leaving school in 1958. Along with around 95% of my fellow trainees, a couple of days later I joined the union.

 

1.7 Australia in 1996 is not what it was in 1958. And there is no going back. An economy well down the deregulation road. A marketplace for goods and services which is now global and which will increasingly ignore national borders. Commitments from national leaders to deliver an international trading system free of protection within the next twenty years or so. Employers who recognise the importance of the contribution of employees both individually and collectively to high value added, high quality enterprises and who are seeking greater flexibility from their workforce. An industrial relations system which is largely based on individual enterprises, not industries, and within which the Industrial Relations Commission plays a much less significant role. Many of these changes have been achieved over the last twelve years or so, often with the support of the union movement.

 

1.8 The contribution of the union movement to the reform process which has taken place over the last fifteen years has been substantial. We have given support to virtually all of the major initiatives of the Federal Government which have been designed to alter the orientation of the economy towards an international perspective and to make it more competitive.

 

1.9 In addition to the broader economic reforms we have also made major changes to the union movement and its way of working :

i] a major process of union amalgamation has been undertaken

ii] workplace reform, multiskilling, best practice and reform to vocational training

iii] wage fixing has been changed from an industry to an enterprise process

iv] a more constructive culture has been encouraged to replace our adversarial approach

v] the number of strikes and disputes has been substantially reduced

 

1.10 All of these changes have taken place with the support and at times leadership from unions and the ACTU. However it is worth noting that the predominantly negative press coverage of the union movement did not change significantly as a consequence of the more positive stance.

2. Trends in Union Membership

2.1 Earlier on I stated that 1996 was a critical year for unions in Australia. Why? Basically because it is the point in time for us to either respond effectively to a very serious loss of membership or acknowledge that we are going to decline in numbers and significance to perhaps the state of unions in the United States and France with memberships of less than 10% of the workforce. This task of reversing membership decline is our first and most fundamental challenge.

 

2.2 1996 is also significant in that for the first time ever this century we face governments at Federal, State and Territory levels which are legislating to do us serious damage and whose apparent aim is to reduce the union movement in Australia to an insignificant force.

 

2.3 Since the start of this decade the number of union members in Australia has been in decline. A decline not only as a reducing percentage of an expanding workforce but also in absolute terms.

 

2.4 Virtually every union is losing members. Exceptions however include unions representing nurses, engineers and scientists, and retail workers. The reasons for the decline are numerous and include the changing composition of the workforce, fewer large employers in traditional industries, greater numbers of small to medium size enterprises, a smaller public sector and greater numbers of workers in part-time and casual employment.

Employment And Union Growth - 1982 – 1993

 

Industry
Employment % Union Members %
Agriculture, Forestry, Fishing & Hunting
+ 24.1% 37.6%
Mining
- 23.0% 33.4%
Manufacturing
- 15.4%, - 31.8%
Electricity, Water & Gas
- 26.9% - 33.0%
Construction
+23.5% - 13.3%
Wholesale & Retail
+ 43.4% + 4.7%
Transport & Storage
+3.9% - 16.8%
Communication
- 9.1% - 19.3%
Finance, Property & Business Services
+52.2%) - 3.5%
Public Administration & Defence
+18.8% + 5.7%
Community Services
+43.2% +25.4%
Recreation, Personal & Other Services
+ 52.7% - 6.1%
Union Membership - Australia 1995
34% of workforce

 

2.5 There are any number of excuses why unions cannot grow or stem the tide of membership loss. They all have some validity but even with those factors there is no reason to accept as inevitable the decline of union membership numbers in Australia. Several unions have demonstrated that with the right combination of services they can grow alongside of a growing workforce.

 

i] APESMA represents engineers, scientists, professionals and managers. It has over 20,000 members and is growing at the rate of around 5% each year.

 

a] it provides it provides individually tailored advice on remuneration matters

b] it offers "extra" services

c] it sponsors the largest MBA program in the country through distance learning and Deakin university

d] it is nationally certified as a "Quality Organisation"

 

ii] SDA is the shop assistants' union. It is growing each year. It provides good quality industrial services to its members and a range of non industrial services. Its communications are of a good standard.

 

iii] The Nurses unions are growing alongside of an expanding workforce. Again good quality industrial services, close contact with membership views, good communications and a positive public profile of its senior officials on health issues retains membership numbers and loyalty.

 

2.6 The unions that are being successful are those which have the capacity to deliver quality services to members consistently throughout the country. [This consistency is not always possible in unions which have a substantial "State" orientation]. These unions also are capable of taking a strategic approach to the issues confronting them and planning for the future, not simply reacting to tomorrow's "crisis". As part of the success stories the unions are also likely to have leading edge technology available for their members to access [APESMA uses the internet for membership communications] and properly equip their organisations with appropriate equipment.

 

2.7 Fundamentally however the question to be answered by the union movement as a whole is whether the services they are able to offer and their value are sufficient to attract workers to become members and pay dues of around $200 plus per year.

 

2.8 Over the past few years unions have expanded their non-industrial services to include benefits such as discount purchasing, free legal advice, cheap travel, low cost home loans and discounted medical and dental services. While these additional services are of some value the evidence to date is that they are not sufficient to attract and retain large numbers of new members. Some new services such as discount air fares are however proving to be very popular.

 

2.9 Basically employees join unions for the industrial services they can provide. Services such as assistance to obtain wage increases, advice on occupational health and safety, better superannuation, improved job security and collective protection when there is a problem with the employer. The service of outstanding importance is to secure wage increases and improve living standards.

 

2.10 Unions have to structure themselves to deliver those services effectively to members. This will require the rebuilding of enterprise based structures of local representatives, and union sub-branches. These membership structures will have to be provided with relevant information of high quality to enable them to represent the interests of members with enterprise level employers. There will need to be acceptance of the authority to negotiate with the employer being increasingly delegated to members at the workplace rather than held tightly by central councils of elected officials. In turn there will be increasing variation between the outcomes agreed at enterprise level. While Award standards will remain paramount and overall union principles maintained there will be a continuation of the trend towards more flexible outcomes at workplace level.

 

2.11 The need for these changes has been recognised by decisions at the ACTU Congress and union national councils. What now has to be achieved is effective implementation of the changes.

3. Wage Improvements for Union Members

3.1 One critical area where the performance of unions will be measured by members is in regard to their ability to deliver wage increases and improve living standards over time. This is our second challenge.

 

3.2 In the absence of an Accord agreement with the Federal Government the environment for obtaining wage increases has fewer constraints however we should not underestimate the difficulty of the enterprise bargaining system when compared to bargaining at industry level. Australia has around 800,000 individual enterprises. So far at the Federal level we have finalised around 5,000 agreements each of which will have to be re-negotiated every two years or so. At the State level there would be several thousand more agreements. Informal agreements would cover many additional enterprises. However this leaves a large number of employees whose wage entitlements are influenced by safety net increases only.

 

3.3 Although the number of agreements is much smaller than the number of enterprises the proportion of employees covered is probably around 65% of those employed under Federal Awards. The obvious reason for this outcome is that many of the individual agreements are with very large enterprises each employing thousands of employees.

 

3.4 As a provider of services to members as employees it is not acceptable to dismiss the thirty five per cent plus not covered by agreements as irrelevant or unimportant. Even if they are employed predominantly in the small to medium size business sector this is where the employment growth is. If we cannot service that sector we are consigning ourselves to a smaller and smaller part of the workforce. The union movement has to develop approaches which enable members in small to medium size enterprises to receive their services especially for the purposes of enterprise bargaining.

 

3.5 There are approaches which are being considered and introduced by a range of unions to improve our performance in the area of wage bargaining. Basically they involve the improved use of computer technology, greater scope for direct membership involvement in bargaining, and better servicing of membership information needs during the bargaining process.

4. Improving Union Structures

4.1 The third major challenge is to ensure that the union structures we have put in place over the last ten years or so are effective in servicing the needs of members. Since the mid '80's the union movement has been restructuring to achieve fewer but larger unions. We have completed that process through a significant number of union amalgamations and we now have the situation where 20 large unions represent over 90% of members under Federal Awards. There is no doubt that a restructuring of the union movement was necessary. By way of example, when I started with the telecommunications and postal union there were over 20 craft based unions representing the 70,000 employees in the area. There was gross waste, duplication and general ineffectiveness as a result of that structure. We now have four unions in the area and the potential exists for much higher service standards.

 

4.2 Small unions are generally ineffective. Larger unions can better service the needs of their members. However if unions do amalgamate, become larger and then do not pay serious attention to how to deliver better services, members can actually find that standards are not as good as they were with the smaller craft-oriented organisation.

 

4.3 Following the amalgamation of unions union members should clearly see an improvement in the quality of service from their organisation. This could take the form of better quality publications, more access to union officials, professional advice on issues such as OH&S, better research facilities, improved office facilities and so on. To date in many cases we have not had the need for a noticeable improvement in services following the amalgamation high enough on the agenda.

 

4.4 Sometimes also the amalgamation has been achieved but we are left with top heavy structures as all the former officials have to be accommodated in the new organisation. At times also political or personality differences have inhibited the integration of amalgamating unions.

 

4.5 In many cases amalgamations have worked well delivering better services to members. There is a small number of outstanding cases where the amalgamation is not appearing to work.

5. Changed Environment

5.1 The final challenge is to work within the changed political environment we are now in. At the State level in States like Victoria, Western Australia and South Australia there has been a range of changes designed to reduce the ability of unions to represent the interests of members, to promote "bargaining" between employers and individual employees and to reduce the role of arbitral tribunals.

 

5.2 At the Federal level the incoming Howard government is proposing a range of changes to the industrial relations system. These include :

 

i] There will be no more national Accord agreements with the union movement

 

ii] Penal provisions of the Trade Practices Act for union involvement in industrial disputes will be re-introduced

 

iii] Any agreements between employers and unions for preference to unionists and a “close-shop” will be made illegal

 

iv] Unfair dismissal protections in awards and legislation will be weakened

 

v] New provisions will be inserted into legislation to encourage individual contracts between employees and employers and bargaining which excludes unions representing employees

 

vi] Provisions will be inserted into legislation to require the arbitration system [the Industrial Relations Commission] to concentrate on economic rather than equity issues in its decisions

 

vii] Existing Federal Awards of the Industrial Relations Commission which prescribe paid rates will be reduced to minimum rates which only guarantee the basic standard

 

vii] The national Trade Union Training Authority is to be abolished

 

xi] The range of issues which can be included in Federal Awards of the Industrial Relations Commission is to be reduced to a specified number of minimum employment entitlements

 

5.3 The ACTU and unions will work towards amending or defeating the most objectionable parts of that package including:

 

i] the introduction of a “free market” for union membership

 

ii] the downgrading of the role of the IRC

 

iii] the re-introduction of the penal provisions of the Trade Practices Act

 

iv] the conversion of paid rates Awards to minimum rates

 

5.4 Some of the proposed changes in legislation have the potential to hurt the union movement quite badly in the short term. The proposition [which many employers oppose] to create a free market for union membership can cause debilitating inter union squabbles over coverage. The abolition of "closed shops" will have an effect on membership numbers. Providing the most objectionable parts of the legislation are defeated we can work with these changes, survive, expand and be stronger if we can make the other changes which unions need to introduce.

 

5.5 We are hopeful that the legislation will require substantial amendment before it will get through the Senate, however it is clear that some of the legislative package will survive.

 

5.6 Whilst it is important that the legislation not get through in its current form the challenges facing unions require us to pay attention to the range of factors which are affecting our capacity to service the needs of members. The problems confronting the union movement did not start on March 3 and even if there was no legislative package we had a big job to restore the union movement in this country.

 

5.7 It will be important that unions concentrate on the most important issues in determining their long term futures which are :

 

i] improving services to members, particularly those of an industrial kind

 

ii] effectively representing members engaged in enterprise bargaining and obtaining consistent improvements in living standards

 

iii] ensuring that their organisations operate effectively and in ways which members can participate and influence

 

5.8 If we can meet these three fundamental challenges we will survive and grow. If we cannot our future is at best questionable.

 

ACTU Assistant Secretary, Bill Mansfield. 18 April, 1996.